India says coal reforms to continue

New Delhi - India will stick to its plans to open up the coal industry to private firms and sell a stake in state-run Coal India, despite the resistance by mine workers, the country's coal and power minister said on Thursday.

The five mineworker unions of the world's largest coal miner called off a five-day strike in its second day on Wednesday, after coal and power minister Piyush Goyal assured them a committee would be formed to address their concerns.

Crippled power plants

The strike had been seen as a test of Prime Minister Narendra Modi's resolve to push through tough economic reforms.

Mineworkers fear the entry of private companies will pressure Coal India to reduce costs, eventually leading to pay and job cuts at the inefficient state behemoth that accounts for about 80% of the country's total output.

Coal fuels 60% of India's power production and worker strikes have previously crippled power plants.

"If they have any concerns they are always open to further discussions and dialogue." Goyal told a news conference.

"(But) there is absolutely no change in any of our plans."

Living without power

Goyal said increasing competition is key to meeting demand for cheap coal and realising Modi's goal of supplying round-the-clock power to India's 1.2 billion people by 2019.

The country still has 280 million people living without power in 56 million homes, Goyal said.

Modi resorted to a rarely-used executive decree in December to implement coal reforms that would allow an auction of coal mines and lead to private companies commercially mining the fuel for the first time in 42 years.

The government is also looking to divest a 10% stake in Coal India in a sell-off drive to meet its budgetary needs.